Solved by verified expert :Chapter
2 Cost Terms, Concepts, and Classifications
Multiple
Choice Questions
16. Indirect
labor is a part of:
A) Prime
cost.
B) Conversion
cost.
C) Period
cost.
D) Nonmanufacturing
cost.
17.
The cost of lubricants
used to grease a production machine in a manufacturing company is an example of
a(n):
A) period
cost.
B) direct
material cost.
C) indirect
material cost.
D) none
of the above.
18. The
salary paid to the president of King Company would be classified on the income
statement as a(n):
A) administrative
expense.
B) direct
labor cost.
C) manufacturing
overhead cost.
D) selling
expense.
19. Direct labor cost is a part of:
Conversion cost
Prime cost
A)
No
No
B)
No
Yes
C)
Yes
Yes
D)
Yes
No
Garrison, Managerial Accounting, 12th Edition 17
Chapter
2 Cost Terms, Concepts, and Classifications
20. Direct material cost is a:
Conversion cost
Prime cost
A)
No
No
B)
No
Yes
C)
Yes
Yes
D)
Yes
No
21. Prime
cost and conversion cost share what common element of total cost?
A) Direct
materials.
B) Direct
labor.
C) Variable
overhead.
D) Fixed
overhead.
22. Prime
cost consists of:
A) direct
labor and manufacturing overhead.
B) direct
materials and manufacturing overhead.
C) direct
materials and direct labor.
D) direct
materials, direct labor and manufacturing overhead.
23. Wages paid to a timekeeper in a factory are
a:
Prime cost
Conversion cost
A)
Yes
No
B)
Yes
Yes
C)
No
No
D)
No
Yes
24. Property
taxes on a company’s factory building would be classified as a(n):
A) product
cost.
B) opportunity
cost.
C) period
cost.
D) variable
cost.
18 Garrison,
Managerial Accounting, 12th Edition
Chapter
2 Cost Terms, Concepts, and Classifications
25.
Depreciation on a
personal computer used in the marketing department of a manufacturing firm
would be classified as:
A) a
product cost that is fixed with respect to the company’s output.
B) a
period cost that is fixed with respect to the company’s output.
C) a
product cost that is variable with respect to the company’s output.
D) a
period cost that is fixed with respect to the company’s output.
